FB Pixel no scriptFlipkart leads festive season sales, while Amazon sinks deeper into controversy in India | KrASIA
MENU
KrASIA
News

Flipkart leads festive season sales, while Amazon sinks deeper into controversy in India

Written by Moulishree Srivastava Published on     3 mins read

Share
Smaller cities—tier 2 and beyond—contributed to about 61% of all the online shoppers during the first leg of festive sales.

While e-commerce giant Amazon is sinking deeper into controversy in India, its arch-rival Walmart-owned Flipkart has emerged as the leader in the first leg of festive sales that kicked off earlier this month.

According to the data compiled by Bengaluru-based consulting firm RedSeer, between October 2 and October 10, e-commerce platforms sold goods worth INR 320 billion (USD 4.6 billion), up 23% from the previous year’s sales.

While Flipkart group, which includes fashion portal Myntra, accounted for 64% of the gross merchandise value (GMV)—the total monetary value of products brought by users on online channels, Amazon made up 28% of the total GMV. The rest of the players contributed a mere 8%.

Source: RedSeer

During the first leg of last year’s festive sales, Flipkart had contributed 68% to the overall USD 3.7 billion GMV compared to Amazon’s 32%. This year, new players like social commerce unicorn Meesho have also been able to capitalize on the festive demand on the heels of massive digital adoption in the country.

Over 850,000 Amazon sellers and more than 375,000 Flipkart sellers participated in the sale this year, according to a report by local media Financial Express. This means a relatively smaller number of sellers on Flipkart sold more products compared to the massive retailer base on Amazon.

The development comes amidst a recent Reuters report accusing Amazon of allegedly creating knock-offs of Indian brands and promoting private-label brands on its platform.

Documents accessed by Reuters revealed Amazon’s private-brands team in India “secretly exploited internal data from its Indian e-commerce portal to copy products sold by other companies and then offered them on its platform.” Amazon also rigged its search results to recommend its private-label brands, the report said.

As such, Amazon and Flipkart are currently facing antitrust investigations by Indian regulators for allegedly giving preferential treatment to certain sellers.

Growth drivers

E-commerce marketplaces generally hold up to three sales events leading to the festival of Diwali. The first of these events is usually the largest and accounts for over 60% of the sales during the festive period.

This year’s GMV growth was driven by an expanding online shopper base. The total number of people who shopped online during the festive sales rose by about 20% to 62 million compared to 52 million last year. Notably, smaller cities—tier 2 and beyond—contributed to about 61% of all the shoppers, while 22% of them belonged to metros, and around 17% came from tier 1 cities.

With almost 40 million shoppers coming from outside major cities, the festival was dictated by affordability schemes, said the RedSeer report. The overall GMV per shopper rose from INR 4,980 (USD 66) in 2020 to INR 5,034 (USD 67) in 2021, indicating “an inherent aspiration in the shopper,” it noted.

The platforms carefully designed affordability schemes through ‘buy now, pay later’ options and bank tie-ups as well as seller-driven discounts “to serve up the most competitive prices of top leading brands and serve the aspiring customer,” said Ujjwal Chaudhry, associate partner at RedSeer Consulting, in a statement.

The report also noted that the growth in e-commerce festive sales this year came despite the competition from offline retailers, which were operational this time around, unlike last year when a majority of brick-and-mortar shops closed due to the COVID-19 pandemic.

Source: RedSeer

Mobiles drove roughly 46% or USD 2.1 billion of the total sales clocked by e-commerce platforms, whereas the fashion category made a comeback this festive season, making up for 17% or USD 782 million of the GMV.

As per the RedSeer estimates, shoppers bought handset devices worth INR 680 million (USD 9 million) online every hour during the first week of e-commerce sales.

“Mobiles, electronics, and appliances remained strong this year, driven by new launches and EMI options,” the report said. It added that fashion has picked up the slack compared to last year, driven by inherent customer demand to refresh wardrobes and new, affordable platforms reaching customers in smaller cities.

Share

Auto loading next article...

Loading...